ERC Tax Credit Check | Find Out If Your Business Qualifies, Claims & Eligibility

ERC Tax Credit Check . The Employee Retention Credit (ERC) is a valuable tax credit designed for both large and small businesses that continued to pay their employees during the COVID-19 pandemic shutdown. Created by the Internal Revenue Service (IRS), this credit serves as an incentive for businesses to maintain their workforce during challenging times. In this guide, we’ll explore eligibility criteria, credit details, and the process of claiming the ERC.

ERC Tax Credit Check | Find Out If Your Business Qualifies, Claims & Eligibility

Eligibility Criteria for ERC

To qualify for the Employee Retention Credit, your business must meet specific criteria. You may be eligible if:

• Business Suspension: Your business faced either a full or partial suspension of operations due to a federal government order related to the COVID-19 pandemic.
• Gross Receipt Reduction: Your business experienced a significant reduction in gross receipts between March 13, 2020, and December 31, 2021.
• Recovery Startup Businesses (RSBs): In the third or fourth quarter of 2021, your business qualifies as a Recovery Startup Business (RSB).

Eligible Industries

The ERC is available to businesses across various sectors, including:

• Education
• Government Contractors
• Healthcare and Life Sciences
• Hospitality and Retail
• Industrial
• Not-For-Profit
• Professional Services
• Real Estate and Construction
• Technology

Calculating ERC Amount

The amount of Employee Retention Tax Credit depends on the number of employees and the wages paid between March 13, 2020, and December 31, 2021. Businesses are categorized as either small or large employers, with small businesses receiving enhanced benefits under the ERC:

• Small Employers: Those with fewer than 100 full-time employees (considering employees with 130 hours of service in the month) can claim the credit for all wages paid to employees during the specified period.
• Large Employers: Those with 100 or more full-time employees can claim the credit for wages paid up to $10,000 per employee for not providing services.

ERC Claim Process

If your business meets the ERC eligibility criteria, follow these steps to claim the credit:

• Complete IRS Form 941x: Amend your payroll taxes using IRS Form 941x for the tax year(s) you’re claiming the credit (2020 and/or 2021).
• Gather Required Documents: Ensure you have the following documents ready:
  • 2020 & 2021 941 Payroll Tax Forms
  • 2019, 2020, & 2021 Profit & Loss Sheets
  • 2020 & 2021 Payroll Summary Report
  • Monthly Healthcare Statement (if applicable)
• Submit Your Claim: Mail the completed IRS Form 941x and supporting documents to the nearest Department of the Treasury or IRS Submission Processing Center, located in either Ogden, Utah, or Cincinnati, Ohio.

Claim Deadline

It’s crucial to note that the deadline to claim the Employee Retention Credit for 2020 and 2021 is April 24, 2024, and April 24, 2025, respectively. Ensure you meet all requirements and submit your claim in a timely manner to benefit from this valuable tax credit.

Conclusion

Stay informed and take advantage of the ERC to support your business during these challenging times.